Map Equity Assumptions Constraints and Dependencies
Explicitly document all underlying assumptions regarding individual availability, salary sacrifice, tax implications, and IP assignment. Identify hard constraints such as visa status, existing IP encumbrance, or personal financial baselines, alongside key legal dependencies.
Completing this action isolates operational and legal fragility within the proposed equity structure before binding legal contracts are executed. It protects the venture from systemic disputes by exposing unstated personal expectations and tax liabilities early.
The founder must deliver a risk-mapped dependency log covering tax structuring (such as HMRC Section 431 elections in the UK), IP transfer conditions, and financial subsistence requirements for each founder, supported by initial legal or tax guidance notes.
Five questions an expert would ask when reviewing your output
Use these to challenge assumptions, pressure-test your logic, and check the quality of this action's output in the context of the parent task and wider venture development.
- 1
What tax advice have you sought regarding the valuation of founder shares at grant to prevent unexpected upfront tax liabilities under UK rules?
- 2
How will you handle the dependency where a co-founder cannot commit full-time until a specific funding milestone is met?
- 3
Why have you assumed that all historic IP generated by individual founders can be cleanly assigned to the new entity without third-party claims?
- 4
What personal financial constraints exist among the co-founders that could force an early exit or premature salary demand?
- 5
How do existing employment contracts or non-compete clauses among founders constrain their ability to hold equity or act as directors?